Downturn as a Challenge: HR imperatives

JHILMIL DAS

Organizations should evaluate their business; their strategy, their financials and their people and internal structure before randomly cutting down on redundancies

In the fall of 2008, we all were stung by the collapse of the world financial markets that hit the economy so badly. However, it should be mentioned that in events of such avalanche in past, every time our history has witnessed a new savior which came along promising a quantum leap into a new land of sustained profitability, dotcom for example. Sustained success is the key behind organizational growth and survival amidst this upheaval and HR managers today are really caught in a whirlwind that is wreaking havoc at every level. Counter-intuitively, some organizations have actually been positively affected by the recession. The same cannot be said for most businesses however, many of whom have been forced to lay off staff and to re-evaluate and re-structure their businesses. The major challenges before the HR today are contribution to a company’s long-term success as well as its short-term survival. It strives to provide solution through addressing to the major concerns based on integration and predictability based on the following –

a) Manage risk against talent surprises and preparation for risk mitigation
b) Proven and effective talent management services from hiring through compensation, support and development
c) Support & guidance to line managers in retention of key human capital
d) Provide assistance in business functions to succeed through workforce and structural optimization

The additional prerogatives of the HR managers also encompass managing the operational effectiveness through internal process efficiency and maximization of human capital investment returns.

The initial step towards this effort consists of planning, which includes alignment of employee goal with organizational goals. The other necessary step obviously is a well-designed succession planning program focused on capabilities. The next step is deliverance based on optimization through cost-effective techniques, resulting in quality staffing or retention. Integration is another effort towards synchronization of HR deliveries through hiring, paying, developing and engaging programs. This increases efficiency and return on investment and creates transparency and confidence among employees. The last word is prediction, which involves measuring the past performance and future expectations. These lagging indicators fall into five categories: cost, timeliness, quantity, quality and human reactions, such as customer satisfaction or employee commitment. These are necessary to evaluate how the organization does against established objectives and goals. Leading indicators are derived by analyzing current events with future implications, for ex. leadership, readiness, engagement, culture, brand, reputation and retention.

In order to improve talent management and performance over the long term, they should also revamp and realign their function, policies and services, as well as seize other opportunities created by the downturn. As an alternative for reduction of redundancy owing to additional headcount, we can take recourse and only eliminate jobs that represent excess capacity, non critical or one that does not fit any longer with the strategic direction and structure of the company. Rather, focus can be aimed at building critical capabilities and key leadership development initiatives. Also reduction of service costs can be initiated in the form of outsourcing, offshoring and renegotiating vendor contract.

A profound talent review can be devised in order to maximize productivity and performance of the workforce, segregating the performers and non-performers and improving bench strength. Initiatives can be taken on energizing and rejuvenating the existing employees through building on employee trust, productivity and commitment.

Workforce today has become leaner, the reason being the driving budget cuts and layoff owing to the recession. During this time, the quality and effectiveness of organizational talent no longer serves simply as a competitive differentiator - it becomes a bottom-line necessity. Each person counts.

Yet, companies looking to employ the best and brightest have their work cut out for them, as the current climate introduces a variety of hiring challenges, for ex. the context of the interview has changed quite dramatically. Earlier candidates had the pick of a lot of different jobs. There was a lot of pressure on the interviewer to sell the job, to sell the company and to attract the right candidate. But today, with the economy the way it is, there are more candidates than jobs. There's a different set of pressures to be able to vet the candidates and make a decision. That increased competition - and in some cases, desperation - among applicants to get noticed can put a strain on interviewers and may require newer tools and techniques of interviewing. Further, companies can encourage candidates to self-screen by improving the accuracy of job descriptions. Also in order to save time and resources, organizations can consider panel interviews rather than the more traditional series of one-on-one interviews.

As companies tighten their belts in response to tough economic times, HR managers has also changed the way training used to be done and are finding new ways to make learning and training more effective and efficient by designing programs that maximize value while minimizing cost.

Most learning organizations rose to the challenge by taking advantage of then-new technologies such as video discs and computer-based training to decrease classroom time and cram as much nonessential content into pre-and post-work as they could, saving only the most valuable content for the classroom. Best-practice organizations also focused on more clearly defining performance objectives tied to training. In many ways, the ability to link learning interventions to a company's strategic objectives represents the epitome of training's aspirations. If HR can point to the metrics that show training's impacts on those objectives, so much the better - for both his budget and people.

If an organization has goals to increase customer retention by 20 percent this year, for example, it has the ability to communicate this goal within a talent management system, which can then automatically communicate the same to every employee, typically by job function. As the process filters down, the goal's components become more specific and actionable, and goal components are embedded into each one’s performance and development plans.

The employee performance goals can be systematically aligned with department goals, which in turn can be aligned with higher-level organizational objectives. This means that organizational goal alignment not only occurs on a top-down basis, but from a bottom-up perspective, too. Employee performance plans within such systems provide associates with an opportunity to share their plans and goals with managers and supervisors. These systems also provide tools and mechanisms designed to encourage employees to work with their managers to align individual goals to both departmental goals and to organizational initiatives and critical success factors. This creates a two-way reporting mechanism that allows all employees to see how they are doing individually and as a team in relation to achieving the company’s objectives. Such transparency not only helps everyone within the company better understand how their work contributes to the overall good of the organization - a key driver of employee engagement and the creation of a high-performance culture.

Amidst several challenges created by the downturn, it also has harbored opportunities if implemented successfully. Companies can reposition themselves to emerge with a higher performing workforce, differentiated capabilities and a great leadership bench.

Recession has forced businesses to take an honest view, and to realistically assess in light of market trends and operational costs, what they need to do safeguard their businesses for the future. In some cases it has lead to redundancies, in others they simply have emerged in able to engage in heightening staff engagement and productivity levels. In some cases it is a mixture of both approaches. Whatever the decision, the people of an organization are at the core of their strategy and it is imperative that the organizations treat them appropriately for the mutual benefit of both parties. HR is the domain that can and should advise on these issues. As a profession we need to be progressively more involved in these discussions and decisions and we must be seen to take the lead with innovative and cost effective solutions that support the businesses in which we work.

It is imperative that organization should take an evaluative look at their business; their strategy, their financials and their people and internal structure before randomly taking decision to cut down on redundancies. With a view to surviving for the long term, organizations must take considered action which sees them optimizing organizational structures and resources with a view to maximizing efficiencies, while at the same time optimizing employee engagement and productivity going forward. When the decision is being taken to go down the route of redundancy, it is important to act quickly. Legal parameters must be adhered to, and staff must be treated with respect and consideration. To this end, they must be met with individually and have explained to them the reasons and consequences of the decision that has been made. All questions should be answered swiftly and as comprehensively as possible and within the constraints of their organizational realities, employers should attempt to provide as much transitional support for the employee leaving their organization, as possible.
Individuals who are faced with redundancy typically go through emotional upheavelment on hearing the news of losing their job. Coupled with this there are practical considerations which they must deal with, both in terms of financial considerations and the need to source new employment. In managing this group and in sourcing or providing in-house outplacement services for them, holistic approach should be taken, which takes account of both the human and practical sides of redundancy, equipping individuals with the skills to move forward. Outplacement help is the new option that companies are offering to their laid off staff. The idea behind the service is to provide the employees with ample counseling and suggestions, and help them prepare better for a new job.
An important benefit of offering outplacement services is the positivism it brings to an employer-employee relationship. The laid off employee goes through classes-either online or internally at the company-to comprehend and present his skills better to potential employers. Also referred to as 'career transition services', they include a wide range of assistance. The service helps the displaced employee with counseling to make him: Understand and cope with the job loss
• Understand job markets
• Initiate job search
• Present skills better on paper and during interview
They also help in keeping the existing staff morale high and positive. Layoffs bring with them damaged morale, fear, reduced productivity, negative emotions and diminishing confidence. But, the practical and comprehensive approach of the outplacements services help in making career transitions easy. Most importantly, organizations are optimistic of improved market conditions and would want to take their talented employees back. Recruiting new employees is a costly affair, and also the talent and skills lost to a competitor are difficult to replace. In India, TCS, IBM, Motorola and Microsoft are some of the organizations to employ outplacement agencies to help their laid off employees.
There is no doubt that we are operating in challenging times and for many people the situation can seem desperate. Now more than ever we must deal with our people with respect, recognizing the impact and consequence that our business decisions can have. When employees are made redundant it is so important to deal with the situation humanely.

Regardless of whether redundancy is a feature in every organization, most employees will be frustrated and or concerned about their job security. These feelings will have a negative effect on motivation and commitment, and consequently performance levels. Organizations must first and foremost recognize this and begin to take active steps to actively listen to their people and to use this time as an opportunity to develop stronger relationships built on mutual responsibility and trust. It is only in this way that we can re-energize that component of our businesses that is so critical to us – that of our Human Resources.

The author is Regional Manager-HR, Aditya Birla Group Financial Services Ltd. The views expressed in this article are the author’s own and do not necessarily purport to constitute an official position of Offline or Material World ALL RIGHTS RESERVED